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On Wednesday, Morgan Stanley (NYSE:MS) analysts increased the price target for Dollar General (NYSE:DG) stock to $115 from the previous $85, while keeping an Equalweight rating. The adjustment reflects a positive outlook on the company’s sequential improvement in comparable sales and solid margin execution. The stock, currently trading at $112.57 with a market capitalization of $24.8 billion, has shown remarkable momentum with a 15% gain in the past week and a 50.6% return year-to-date. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.
The analysts expressed caution regarding potential challenges in the latter half of 2025. They noted that macroeconomic factors, tariffs, and policy changes, such as adjustments to SNAP benefits, may intensify and impact the company’s performance. InvestingPro has identified several key factors affecting Dollar General’s outlook, with 8 additional exclusive ProTips available to subscribers.
Dollar General is also expanding its digital presence, with plans to extend same-day delivery services to 10,000 locations. This initiative is part of the company’s strategy to enhance its digital channel offerings.
The current price target adjustment and maintained rating suggest a balanced view on Dollar General’s prospects, considering both its operational strengths and potential external pressures.
In other recent news, Dollar General has reported first-quarter results that exceeded expectations, leading to several analyst revisions. The company posted an adjusted earnings per share of $1.78, surpassing both Telsey’s estimate of $1.49 and the FactSet consensus of $1.48, along with a 2.4% increase in comparable store sales. Following these results, BofA Securities raised its price target for Dollar General to $135, maintaining a Buy rating, while Oppenheimer upgraded the stock to outperform with a new price target of $130. Citi also increased its price target to $112 from $101, though it kept a Neutral rating, citing concerns about competition with larger retailers like Walmart (NYSE:WMT).
KeyBanc maintained a Sector Weight rating, noting the company’s strategic initiatives and revised guidance for 2025. Telsey raised its price target to $120, acknowledging Dollar General’s strong performance and optimistic future guidance. The company’s management remains optimistic, updating its guidance for 2025 to reflect higher expectations for sales and earnings. Dollar General’s strategic focus includes SKU rationalization and inventory reduction, which are expected to enhance operational efficiencies. Analysts have highlighted the company’s ability to attract middle- and higher-income consumers, contributing to its strong performance amid an uncertain economic environment.
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